From the TUC

The last government, jobs and disadvantage

18 Jun 2010, by in Equality, Labour market, Society & Welfare

What was the last government’s record on employment for people from disadvantaged groups? What, in particular, has happened during the recession?

An important article by Ruth Barrett in the latest issue of Economic and Labour Market Review (the Office for National Statistics’ on-line magazine) looked at this issue. It measured what has happened to the employment rates of disabled people, lone parents, members of minority ethnic groups, people aged 50 and over, people with low qualifications and people who live in the most deprived local authority wards.

Each of these groups has a lower employment rate than the rate for people generally. In December 2009, the overall employment rate was 72.6%. The employment rates for members of the disadvantaged groups were:

  • Disabled people – 46.6%,
  • Lone parents – 57.3%,
  • Members of minority ethnic groups – 59.6%,
  • People aged 50 to state pension age – 71.0%,
  • People with low qualifications – 55.8%, and
  • People who live in the most deprived local authority wards – 62.7%.

This is a persistent problem, and members of these groups faced employment disadvantage before the last government was first elected. We can measure whether they had any success in reducing this disadvantage by measuring what happened to the gap between members of a group and everyone else who wasn’t a member of that group.

Importantly, Ms Barrett also looked at what happened during the recession. In previous economic cycles these employment gaps have often been ‘hyper-cyclical’ – members of disadvantaged groups gain jobs even more quickly than the rest of the population when the economy is growing, so the gap shrinks. But then they lose these jobs just as quickly during recessions, returning to much the same starting point.

Employment gap: disabled people

Between 1998 and 2009, there was a substantial narrowing of the disability employment gap, from 41.3 percentage points to 31.0.

Since the start of the 2008/9 recession, both disabled and non-disabled people have lost jobs and their employment rates have fallen. Disabled people’s employment rates have not fallen as much, however: the employment rate for disabled people fell by 1.2 percentage points, the employment rate for non-disabled people by 2.4 points, so the gap has shrunk during the recession, though at a slower rate than before.

Employment gap: lone parents

Between June 1997 and December 2009, the gap between lone parents and people in all other types of family shrank from 29.5 percentage points to 16.5.

Since the start of the 2008/9 recession, lone parents have been the only disadvantaged group that has actually seen its employment rate increase, by 0.9 percentage points. As the employment rate has fallen for everyone else, the employment rate gap has fallen by 2.2 percentage points during the recession.

Employment gap: members of minority ethnic groups

The article measures the gap in June 2001 and December 2009. During this period, the ethnic minority employment gap fell from 18.6 percentage points to 14.5.

During the recession, employment rates have fallen both for white people and people who are members of minority ethnic groups. The fall has been a little larger for white people – 2.2 points – than for people from minority ethnic groups – 1.9 points.

Employment gap: people aged 50 and over

The article measures employment rates in March 1995 and December 2009 for people aged between 50 and state pension age and for people aged 25 to 49. Employment rates rose for both, but more for the older group, so the gap narrowed, from 14.6 percentage points to 9.2.

Employment rates for both groups fell during the recession, but much more for the 25 – 49 year olds, so the employment gap fell by 1.2% during this period.

Employment gap: people with low qualifications

Between March 1995 and December 2009, the employment rate for people with low or no qualifications actually fell substantially, from 60.1% to 55.8%. As a result, the employment rate gap grew, from 17.0 percentage points to 21.6. But part of this change may actually be a success story – the article notes that, during this period, the proportion of working age people with low or no qualifications fell just as substantially, from 36.6% to 22.7%. The article does not consider what has happened to this group during the recession.

Employment gap: people who live in the most deprived wards

The article measures the gap in December 2003 and December 2009 (for Great Britain only: the other groups are measured on a UK-wide basis). In this short period, there has been little change in the gap, which has shrunk from 12.9 percentage points to 12.3. This 0.5 point shrinkage includes 0.2 points since the start of the recession.

Multiple disadvantage

One objection to this way of looking at employment might be to suggest that these groups aren’t independent of each other – disabled people have low levels of qualifications and members of minority ethnic groups often live in deprived areas, for instance. How do we know that the lower employment rate of disabled people isn’t because of their low qualifications, rather than the fact that they are disabled? How do we know that older people’s lower employment rate isn’t because older people also tend to have lower qualifications?

A strong indication is the fact that the more of these groups people are members of, the less likely they are to be in employment:

  • No groups – 82.6%
  • 1 group – 75.4%
  • 2 groups – 62.4%
  • 3 groups – 42.9%
  • 4 groups – 28.2%
  • 5 or 6 groups – 14.5%
  • Total – 72.7%

All in all, the case for action to help members of all these groups to get jobs is strongly borne out by this article. It is morally right – all these groups have lower than average employment rates. And this story shows that it is possible to make a difference employment rates have been rising for most of these groups and employment rate gaps have been coming down, even during the recession.

Now is not the time to cease these efforts. One point the article forbears from making is that disabled people and members of minority ethnic groups are particularly likely to work in the public sector: for them, the arguments about public sector cuts will have an extra resonance.

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